What is this?

The finance minister for Alberta, home to the bulk of the country’s beleaguered energy industry, said Tuesday the crash in oil prices has become “dire” but that a bottom – and start of a recovery – is now forming.

“The situation with commodities is dire,” Alberta Finance Minister Joe Ceci said, not just for Alberta but “all of Canada.”

Related

Ceci was speaking to reporters after weekend meetings with his counterparts from other provinces and territories. The meetings were also attended by Bill Morneau, the new federal finance minister and Stephen Poloz, the governor of the Bank of Canada.

North American oil prices have fallen to 11-year lows in recent days amid a supply glut that continues to grow.

Oil’s sharp descent has spearheaded a global slump in commodity prices in general amid lacklustre demand and economic growth around the world.

‘Getting better’

Some forecasts are calling for a meaningful rebound in oil prices next year, however. Economists at Royal Bank of Canada suggested North American crude prices will climb to the $60/barrel range. The same forecast said more cuts were likely for the energy sector next year despite the rise.

“In some respects, people think it might be the bottom of the trough and that things are going to be building and getting better going forward,” Ceci said.

“Certainly I think for Albertans that would be a really good outcome, and hopefully their forecasting is correct.”